But as the Financial Times notes, multiple corporations are hatching contingency plans for how they would need to do business in Europe if the Euro is done away with.
Concerned that Europe’s political leaders are failing to control the spreading sovereign debt crisis, business executives say they feel compelled to protect their companies against a crash that can no longer be wished away. When German chancellor Angela Merkel and French president Nicolas Sarkozy raised the prospect of a Greek exit from the eurozone earlier this month, it marked the first time that senior European officials had dared to question the permanence of their 13-year-old experiment with monetary union.The potential political fallout from a debilitated Euro was examined in this Financial Times editorial.
The risk of a grave economic crisis in Europe is severe. The threats of sovereign-debt defaults and the break-up of the European single currency are rising – and with it, the attendant threats of collapsing banks, popular panic, deep recessions and mass unemployment. That would indeed feel like a modern version of the Great Depression.
The European Union, taken as a whole, is the largest economy in the world – so economic chaos here inevitably has global ramifications. It would depress trade and threaten the global financial system.
The lesson of the 1930s is that a global depression weakens democracies, leads to the rise of radical new political forces – and, in the process, raises the risk of international conflict.
A modern version of the 1930s would see a new generation of nationalist politicians rise to power in Europe, against a background of economic chaos and the break-up of the European Union. Tensions would also rise outside Europe, as the global economic situation worsened. The balance of power in Asia would shift even faster, with a rising China facing a weakened America. In both China and America, an economic crisis would see nationalist and protectionist forces gain influence.
These scenarios are not implausible.However, the author does acknowledge that they also are not likely.
What is likely, at least in the short term is continual pressure from Germany and France for reforms to the EU that would allow for more interference in the domestic financial affairs of any one member. And with France on the brink of a recession, it is not hard to see why.